Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It

by April Dunford

Great positioning takes into account all of the following: The customer’s point of view on the problem you solve and the alternative ways of solving that problem. The ways you are uniquely different from those alternatives and why that’s meaningful for customers. The characteristics of a potential customer that really values what you can uniquely deliver. The best market context for your product that makes your unique value obvious to those customers who are best suited to your product.

These are the Five (Plus One) Components of Effective Positioning: Competitive alternatives. What customers would do if your solution didn’t exist. Unique attributes. The features and capabilities that you have and the alternatives lack. Value (and proof). The benefit that those features enable for customers. Target market characteristics. The characteristics of a group of buyers that lead them to really care a lot about the value you deliver. Market category. The market you describe yourself as being part of, to help customers understand your value. (Bonus) Relevant trends. Trends that your target customers understand and/or are interested in that can help make your product more relevant right now.

Your market category can work for you or against you. If you choose your category wisely, all the assumptions are working for you. You don’t have to tell customers who your competitors are. It’s assumed! You don’t have to list every feature, because it’s assumed that all products in the category have basic category functions. However, a poor category choice can turn that power against a product. If the market category we select triggers assumptions that do not apply to our product, then a good portion of our marketing and sales efforts are going to be spent battling those assumptions.

Trends are important because, as customers, we want to learn about new, interesting and potentially disruptive technologies or approaches. Nobody wants to be left behind when a shift happens, so we’re constantly looking out for new developments that might have an impact on us and our business.

Because these relationships flow from one another, the order in which you define the components is very important. I’ve seen teams start with defining key features, without looking at competitive alternatives, and the resulting positioning doesn’t connect with how customers really evaluate a solution. Similarly, I’ve seen teams start with value or a segmentation and end up with positioning that doesn’t click with customers. In the work I’ve done with startups, I’ve determined that it’s critical to start with understanding what the customer sees as a competitive alternative, and then working through the rest of the components—attributes, value, characteristics, market category, relevant trends—from there.

Think about the difference between your best-fit customers and your other customers. Your other customers think your product is OK for the price, but they will jump ship if a different company offers a cheaper or better version. These customers are harder to close business with—they take their time making a purchase decision and frequently ask for a discount. In short, they like your product but they just don’t love it.

Now think about your best customers. Everything about doing business with them is different. They understood your product immediately and couldn’t wait to get their hands on it. They bought quickly and instead of asking for a cheaper price, they might have told you your product should be priced higher. They tell their friends about your product, and not only do they not churn, they will fight anyone who tries to take it away from them. They don’t just like your product, they loooooove it.

Target as narrowly as you can to meet your near-term sales objectives. You can broaden the targets later.

There are a few ways to go about this: Use abductive reasoning. The adage “if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck” also applies to new products. With abductive reasoning, you choose a market category by isolating your key features and their value, and asking yourself, What types of products typically have those features? What category of products typically deliver that value?

If you are launching a new product, particularly if you are a small business just starting out, the Head to Head style is rarely a good choice. Trying to beat an established market leader at their own game is a bit like trying to out-cola Coke. It would be foolish for a small company to ever try.

Dominating a small piece of the market is generally much easier than attempting to directly take on a larger leader. From a marketing and sales perspective, smaller subsegments are easier to reach and target, and gaining traction in a market that is more homogeneous is generally easier. List building is easier when you are targeting a subsegment, as is getting in front of groups of prospects. Your value proposition can be highly targeted to these prospects and you will generally have an easier time making your solution’s distinct advantages obvious to prospects. In my experience, one of the best advantages of this style is that once you begin to get traction with some customers, your advantage in the subsegment tends to accelerate quickly. For example, if you are targeting law offices or banks, success with even a single customer is directly applicable to the next customer and can help move the next deal along quickly. Communities also tend to cluster and share information with each other. As you close more business in a particular subsegment, knowledge of your solution in the community will grow quickly because of the links between people in the segment.

Word-of-mouth marketing happens most naturally in tight market subsegments.

The subsegment needs to be easily identifiable—meaning if I had to create a list of prospective buyers, I could figure out a way to do that. For example, I can easily make a list of companies that have more than 1,000 employees by searching the internet for company size info, or a list of Pokémon fans by looking at active users on fan sites or email groups. I would have a much more difficult time creating a list of companies that value design or happy people.

You have the ability to meet the special needs of the subsegment much better than the category leader. The need of the subsegment must be clearly identifiable, but even when it is, your ability to meet it must be strong enough to convince buyers to go with you over the safer choice of the market leader. These buyers were getting along for the most part by buying a solution that didn’t do everything but was likely “good enough” for their business. Convincing them to switch will require showing them that you have deeply understood their specific pain and have fully solved the problem.

Companies can get too focused on the trend to the exclusion of the market, which ultimately leads to confused customers. It’s like describing why you are interesting without first telling people who you are.

Another way that using trends can get you in trouble is if you focus on the trends and the market, but don’t show the link to your actual solution. One example of this is companies that get a little carried away with blogging and other forms of content creation—they are so busy writing content to attract readers that they forget there is an actual solution their company sells. While the trend might be fun to read about, it doesn’t help to sell any product.

The next stage is to make the positioning real across the company. How do you implement a position? The most obvious immediate next thing after a change in positioning is to create new messaging that reflects the positioning. Interestingly, however, having worked with dozens of companies on their positioning, I’ve found that before we tackle messaging, it is more effective to craft what I call a “sales story.”

The point of working through the sales story is that everyone in the discussion can agree on how the positioning translates into a “pitch.” To do that, the team needs to agree on how to define the problem, current solutions, the gap and the key purchase criteria that a customer should have when looking for a solution in your market.